1. Field of Invention
This invention relates to a method and apparatus for authorizing credit card purchases. Specifically, this invention allows retail vendors to validate credit card purchases during a sale.
2. Description of Related Art
Retail vendors typically perform a credit card validation to determine whether a credit card has been reported as missing or stolen and/or whether there is sufficient credit to make a particular purchase. Most vendors utilize an electronic credit card authorization device to communicate over a telephone line with the credit card company and perform the credit card validation.
Conventional credit card authorization devices have a magnetic slot reader for receiving information from a magnetic strip on the credit card. The authorization device initiates a call to the credit card company computer, encrypts information regarding the credit card and transmits the encrypted information to the credit card company computer. The credit card company computer decrypts the information and checks whether the credit card has been reported as stolen or missing and/or whether the credit limit would be exceeded by the requested purchase amount. The credit card company computer forwards an authorization signal or a non-authorization signal to the credit card authorization device depending on the outcome of this check.
Current credit card authorization devices are incapable of determining whether the holder of the credit card is authorized to use the credit card. The prevalent method for determining whether the holder of the credit card is authorized to use the credit card requires the vendor to visually inspect a customer's personal signature and determine whether the customer's signature matches the signature on the back of the credit card.
If the signatures do not match, the vendor is supposed to refuse the credit card transaction and, presumably, call the police and the credit card company to inform them of a possible theft of the credit card.
Many problems arise from this visual authorization check. First, the vendor is placed into an awkward and possibly embarrassing situation of making a personal judgment as to whether a signature "matches." In addition, because vendors are under the pressure of reaching sales goals, their judgment of whether a signature matches can be biased. In fact, many vendors, due to time constraints or a desire to make sales goals, do not even look at a customer's signature to determine whether the customer is an authorized user of the credit card. Accordingly, credit card companies have incurred great costs in providing purchase credit to unauthorized users of credit cards.
Thus, the industry lacks a device and method that can be used during a sale and which quickly, inexpensively, reliably and without embarrassment to the vendor determines whether a user is authorized to use a particular credit card.